Foreign home ownership clarification
You would have already seen in the news that foreigners will not be able to buy existing houses in New Zealand from around the beginning of 2018 and expected to pass in before Christmas 2017.
The new Prime minister said “Anyone who was not either a citizen or resident of New Zealand would not be allowed to purchase existing homes. The Government will introduce an amendment to the Overseas Investment Act to classify housing as ‘sensitive’ and introduce a residency test.”
Foreigners would still be able to buy land and develop housing on it for on-sale. Australians would have a special carve-out to still be able to buy homes – as Kiwis do in Australia. The law was not retrospective so would not apply to those who had already bought houses.
So what does this mean for landlords?
All foreigners that want to move here or live in New Zealand for a short or long time will need to rent. Plus if foreigners do decide to purchase land and build this will take from anywhere between 2 to 4 years to complete depending on the site and build complexity.
Foreign investment in residential housing is a small percentage and no real data has come out but it does give comfort to current and future landlords that rental demand will still continue to grow in all regions where foreigners decide to live.
From next year this policy will be in place so if you are a foreigner looking to purchase now I would highly recommend to doing this ASAP otherwise you will have to wait until you get your residency status or you decide to purchase land and build. The second option will be a lot harder especially in the major cities where there is less land.
At Inspire Property we have foreigners from all around the world. They are a great asset to New Zealand and we welcome them here in our great country. We love to see the diversity that they bring in things like knowledge, culture, jobs and business.